Do these other readers work if the form specifically says "This form can only be opened in Adobe Reader"? I tried other readers before and got error messages.

Yes, they often work even when the form claims it can only be opened in Adobe Reader. That message is usually just put there because Adobe Reader is the most common PDF software, but technically many restrictions are specific to Adobe's implementation. Foxit Reader has been my go-to for several years precisely because it ignores many of these artificial limitations. Just make sure you're using the latest version, as older versions might not handle some newer form features correctly.

Does Free File Fillable Forms do any error checking? When I tried using it a couple years ago, it was super basic and I ended up making calculation errors.

17 But realistically, would the IRS really come after someone for not reporting a tiny amount like $50 or $100? I mean, they must have bigger fish to fry, right?

9 While the IRS certainly focuses more resources on larger discrepancies, their automated matching system doesn't discriminate based on amount. I've had clients receive notices for discrepancies as small as $83. The issue isn't that they're "coming after you" for small amounts - it's that their system automatically flags mismatches. Once flagged, it can trigger notices, potential penalties, and interest on the unpaid tax. The headache of dealing with IRS correspondence typically far outweighs the small amount of tax you might owe on minor income. Plus, establishing a pattern of accurate reporting helps if you're ever selected for audit for other reasons. Better to report everything properly than risk complications over small amounts.

10 If you sold personal items for less than you originally paid for them (like used furniture), that's not considered taxable income - it's actually a personal loss. You only need to report income from selling things if you made a profit compared to what you originally paid. For example, if you bought a couch for $800 and sold it used for $300, that's not taxable income because you sold at a loss. But if you bought items specifically to resell them at a higher price, that would be taxable no matter the amount.

Is there any software you recommend for creating and filing the 1099s? I'm guessing I can't just make these myself on regular paper?

You can use tax software like TurboTax, H&R Block, or QuickBooks to prepare and file your 1099s. There are also specific 1099 filing services like Track1099 or Tax1099. The IRS has specific paper requirements if you want to print them yourself - they need to be on official red "scannable" forms which you can order from the IRS or buy at office supply stores. But honestly, e-filing is much easier and more reliable. Most software will e-file with the IRS and let you print copies for your contractors.

This is the right answer. The way OP structured this, they've basically created a business relationship with all those subs. Direct payment from homeowner to subs would have been cleaner taxwise.

Thanks for bringing this up! We do have the au pair through an official agency program, so they handle a lot of the employment paperwork. But I wasn't sure if we needed to do anything additional for tax purposes. Do you know if we still need to file a Schedule H if the agency is involved?

Even with an agency involved, you'll typically still need to file Schedule H as the host family is usually considered the legal employer. The agency facilitates the match and handles visa sponsorship, but they don't typically handle the employment taxes. You should check your contract with the agency, but in most cases, you need to be withholding Social Security and Medicare taxes and paying the employer portion. The good news is that properly documenting this employment relationship strengthens your case for any related tax deductions or credits you're claiming.

I've done it, but ONLY for the portion related to medical care for my son with autism. We had our developmental pediatrician write a letter specifically stating that our au pair was implementing his therapy plan at home, and we documented the hours spent on those activities vs regular childcare. We deducted about 30% of our au pair costs as medical and took the dependent care credit for the rest. No audit issues for 3 years now.

Did you have to file any special forms with your tax return, or just include a statement explaining the involuntary conversion?

You'll need to attach a statement to your tax return explaining the involuntary conversion, including details about the original property, the date of the fire, the insurance proceeds received, and information about the replacement property. There's no specific IRS form for involuntary conversions, but depending on your business structure, you'll report the relevant information on different forms. For example, if you're a sole proprietor, you'll generally report it on Form 4684 (Casualties and Thefts) and Schedule D. If you're organized as a corporation or partnership, you might need to use Form 4797 instead. My accountant also included a detailed supporting statement breaking down exactly which portions of the insurance proceeds qualified for deferral and how the replacement property satisfied the "similar use" requirements. This detailed documentation is what ultimately helped me get through the audit without any additional tax assessment.

This is an excellent point. I had the same issue in New York. The state wanted more documentation than the feds did, and they had a slightly different interpretation of what qualified as "similar use" property.